China has far greater ambitions for the region than just reclaiming some tiny islands.

By Feng ZhangFeng Zhang is a Fellow in the Department of International Relations at the Australian National University’s Coral Bell School of Asia Pacific Affairs and an adjunct professor at the National Institute of South China Sea studies in China. He is the author of Chinese Hegemony: Grand Strategy and International Institutions in East Asian History.

June 23, 2015

In late 2013, Beijing started taking a very different approach to sovereignty disputes in the South China Sea — although few outside China noticed the change. Instead of directly confronting the other regional claimant states, Beijing began the rapid consolidation of, and construction on, the maritime features already under its control. And it did so on a scale and pace befitting China’s impressive engineering prowess.

Much of the outside world only realized this approach in early 2015, after several high-profile U.S. think tanks published high-resolution satellite images showing the extraordinary progress of China’s island construction, including military facilities and runways, which could extend Beijing’s military reach over the contested waters. This worried Southeast Asian countries, particularly Vietnam and the Philippines, because their claims to parts of the South China Sea overlap with China’s, and because they fear Beijing’s island construction threatens their security. It worries Washington as well: In May, the U.S. government vowed to assert freedom of navigation by sending military assets to Chinese-controlled islands in the South China Sea. And in late May, in Singapore, U.S. Secretary of Defense Ashton Carter called for “an immediate and lasting halt to land reclamation by all claimants” — in other words, China.

Intriguingly, half a month later, Beijing indicated that it would soon conclude its land reclamation projects in the South China Sea. The Ministry of Foreign Affairs even held a special press conference to deliver that message.

So what happened? Is Beijing changing its strategy in the South China Sea or backing down because of pressure from Washington? Perhaps. A more accurate way of looking at the issue, however, is to see that Beijing believes it has achieved enough in this round of island construction. China, according to Carter, has reclaimed more than 2,000 acres over the last 18 months — a claim that Beijing has not publicly disputed. And the facilities Beijing will continue to build on the new land — including airstrips, ports, and lighthouses — will be sufficient for a wide range of civil and military purposes. (Indeed, Beijing is not denying that those facilities will have “necessary military defense” functions — although it is certainly not emphasizing that aspect of its island construction.)

Beijing’s South China Sea policy actually hasn’t changed much. Reclamation will stop for now, but construction of facilities on the reclaimed land will continue, and Beijing hasn’t changed its claims to the South China Sea.

Nevertheless, this special Ministry of Foreign Affairs announcement requires an explanation, for it is intended to send an important diplomatic signal. China has learned its lesson from negative regional responses to island building in the South China Sea. Not of the dangers of a military showdown with the United States in the area, which it considers a remote possibility, but on how negative regional reactions can harm its larger foreign-policy goals. Specifically, Beijing has learned how land reclamation on the current scale and pace is threatening the policy priority of building a maritime Silk Road through Southeast Asia.

Ever since President Xi Jinping articulated the goals of building a Silk Road economic belt through central Eurasia, and a maritime Silk Road through the South China Sea and Indian Ocean, in late 2013, the One Belt, One Road initiative has become something like a grand strategy — integrating the domestic needs of economic restructuring with the international ambitions of expanding China’s diplomatic and economic influence. OBOR encompasses 4.4 billion people, 64 countries, and a combined economic output of $21 trillion — roughly twice the annual gross domestic product of China, or 29 percent of global GDP. This is literally China’s economic diplomacy for half of the world, under one single policy framework. If OBOR is indeed China’s grand strategy — and if it’s really one that Xi takes to heart — then nothing internationally should stand in the way of its execution.

The problem with Beijing’s current South China Sea policy is that it increasingly conflicts with OBOR, because it is damaging China’s relationships with the Association of Southeast Asian Nations (ASEAN), countries on which the success of the maritime Silk Road depends. As a result of Beijing’s 2012-2013 standoff with Manila over the contested Scarborough Shoal and Second Thomas Shoal, and the violent tensions provoked with Hanoi by placing an oil rig near the contested Paracel islands in May 2014, China’s relationships with the Philippines and Vietnam are at their lowest points in recent history. Now Beijing’s island construction is making these countries — and Southeast Asia as a whole — feel more threatened.

Yes, all 10 members of ASEAN have joined the Beijing-led Asian Infrastructure Investment Bank, one of the financial arms of OBOR, thus signaling their desire to partake in its economic opportunities. But the persistence of South China Sea tensions and China’s growing military clout in the region will dispose them to view OBOR in geopolitical terms, not in terms of economic cooperation, which Beijing prefers.

Beijing is realizing that excessive and ongoing tensions in the South China Sea are detrimental to its larger foreign-policy interests. Given the greater ambitions of OBOR, the South China Sea project should not be allowed to hijack or distort the overall direction of Chinese foreign policy.

Beijing is also becoming increasing aware of another pressing need for its South China Sea policy: keeping the region relatively stable so as not to give other countries a pretext for creating troubles in China’s relationship with ASEAN countries. Beijing fears an anti-China alliance formed among the United States, ASEAN, and perhaps also Japan, Australia, and India, in a united opposition to its South China Sea policy. This would doom the maritime leg of OBOR, which must pass through the South China Sea and obtain support from key ASEAN countries like Indonesia, Malaysia, and Singapore. It would also be a huge setback to Chinese security interests in maritime Asia, making its policy options more constrained and costly.

It would be true strategic folly if unrestrained land reclamation serves no significant interests other than to drive ASEAN countries into the arms of the United States. The top priority of Beijing’s South China Sea policy now is to prevent such an anti-China alliance from forming and to support the grand strategy of OBOR in any way possible.

One should also not lose sight of how the June 16 press conference came just before the seventh U.S.-China Strategic and Economic Dialogue, an annual series of top-level bilateral meetings, being held this year on June 23-24 in Washington, D.C. The meetings are also just three months before the biggest event of Sino-U.S. relations this year — Xi’s state visit to the United States in September. The announcement to conclude land reclamation was in part timed to create a more congenial environment for developing the China-U.S. relationship in the second half of this year. Make no mistake: Despite what China scholar David Lampton has called “a tipping point in U.S.-China relations,” Beijing still wants and values a stable relationship with Washington. Chinese officials are now doing everything possible to make Xi’s visit a success.

And it’s not only the Chinese taking steps to improve the relationship. On June 18, two days after the Chinese announcement, U.S. Assistant Secretary of State Daniel Russel tried to tone down tensions in the South China Sea by saying that the United States is determined to avoid military confrontation with China (although he also made it clear that continued construction of facilities on the reclaimed islands will remain a U.S. concern). One feels that a rapprochement between China and the United States on the South China Sea is taking place.

So, although Beijing’s South China Sea policy hasn’t changed much in substance, it has sent a conciliatory and positive signal to the outside world, in effect saying that it will halt its land reclamation in the South China Sea and defuse tensions in the region. What Beijing is not publically saying — but which it sincerely hopes the outside world will understand — is that it expects greater cooperation with OBOR. In other words, the South China Sea reclamation project has ceased to be a core interest of Chinese foreign policy, if, indeed, it ever was.